The shoe is on the other foot at the Securities and Exchange Commission, which is being accused of violating federal law because of its failure to do “any economic analysis” of the so-called Volcker rule.

House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Rep. Scott Garrett (R-NJ) this week sent a letter to SEC Chairwoman Mary Jo White asking her to explain why the commission did not do the required analysis. The SEC ordinarily is on the other end of such accusations, as its enforcement arm brings complaints against financial institutions for alleged violations of law and failures to follow regulations.

“Conducting an economic analysis is a well-established legal requirement and both the Administrative Procedure Act and the Federal securities laws require the Commission to conduct a detailed analysis of the likely economic consequences of its rules and to connect these consequences to efficiency, competition and capital formation. At 932 pages, there is no doubt the Volcker rule will have a significant impact on the U.S. capital markets and the broader economy,” read the letter.

The SEC declines to comment on the letter.

‘Solution Searching for Problem’

Also this week the House Financial Services Committee held a hearing on the jobs impact of the Volcker rule, which was approved by regulators December 10. The rule was placed in the Dodd-Frank financial regulatory bill to separate investment banking, private equity and hedge fund operations of banks from their consumer banking operations. It is named for former Federal Reserve Chairman Paul Volcker.

In his statement for the hearing, Hensarling said the Volcker rule “is a solution in search of a problem.”

“It is important to note that of the roughly 450 financial institutions that failed during or as a result of the crisis, not a single one failed because of proprietary trading,” Hensarling said. “In fact, financial institutions that varied their revenue stream were better able to weather the storm and thus keep lending and thus support jobs.

“Instead, these bank failures came largely from a concentration in lending in the subprime and sovereign debt markets. And who steered these financial institutions into these markets? Sadly but not surprisingly, it was Washington and they’re still at it.”

Also testifying was Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association.

Hoping for More Time

“A final regulation as significant as the final Volcker rule, with broad market impacts and a global reach, will not be simple to implement, examine or supervise,” Bentsen said during his testimony. “In order to lessen the potential negative market impacts, regulators should consider, as issues arise, giving particular markets or products additional time to comply.”

He also said there is a danger that regulators in different agencies could enforce the Volcker rule differently, which would add to financial institution costs and confusion for institutions and their customers.

Hensarling put some of the blame for high unemployment and a near-record low workforce participation rate on the Volcker rule:

‘Need More Jobs, Less Volcker’

“As a nation we just marked the 50th anniversary of the War on Poverty; tragically, a failure on more than one level. To win, we need more jobs, which means we need less Volcker,” he said.

“In two weeks the President of the United States will deliver his sixth State of the Union Address. Early in his term, he received from a Democratic Congress every single major policy initiative he asked for: the stimulus, Obamacare, and Dodd-Frank from which the Volcker Rule arises – he got it all.

“The result of this is an unprecedented spending spree and regulatory tsunami, the effects of which are now apparent to all. We have become a part-time worker, unemployment check, food stamp, insolvent nation with few opportunities and even fewer hopes for the truly needy amongst us. The president’s policies have exacerbated the very income inequality that he now decries.”